Should You Include Food Waste Reduction in Your KPIs?

The eradication of food waste is a goal arguably more important than any other for stakeholders in food supply chains, yet, not surprisingly, it is one rarely observed in the key performance indicators (KPIs) employed by supply chain professionals or by retail operators as they strive to measure the overall success of their efforts.

There is a social and environmental urgency to eliminate food waste from supply chains and operations - in the United States alone as much as 30 percent of food, valued at roughly $48 billion, is thrown away each year. Supply chain professionals can work toward success by raising awareness about this issue through quantification and tracking of food waste.

One of the enduring mantras of management is that you can’t manage what you can’t measure, and this is equally true for food waste. One early adopter of this approach is Tesco , who has introduced transparency into its food loss reporting.

During 2013/2014, over 62,000 tons of food were wasted in Tesco stores and distribution centres in the UK. While this amount represents less than one percent of food products sold during this period, Tesco continues to work toward decreasing this amount - an objective that makes commercial as well as social sense.

Drilling deeper, Tesco has developed food waste profiles for its 25 most frequently purchased perishable products, and set in place initiatives to reduce waste associated with them.

Regardless of whether your company deems food waste as a KPI, it certainly warrants being quantified, tracked, and managed, with an eye toward reducing its environmental impact and benefitting those in need. Attention to cold chain best practices, field and packing sheds and temperature maintenance are just a few of the ways fresh produce companies can make food waste reduction a priority.